Urges
shareholders to await potential alternative solutions
The Board of
Directors of Cermaq has in accordance with the Norwegian Securities
Trading Act § 6-16 considered the offer document from Marine
Harvest. The Board has unanimously decided upon a recommendation to
the company's shareholders not to accept the offer, which today has
a value of approximately NOK 105 per share. The Board maintains its
previous statements that neither the underlying value of Cermaq nor
the synergies that could have been realized through a combination
are reflected in this offer. It is further considered most
unfortunate that the acceptance level again is set at 33.4%. The
Board and management of Cermaq have made good progress in relation
to the alternative processes that are ongoing to demonstrate the
value of the company and expect to present this before the
shareholders need to decide upon the current offer from Marine
Harvest.
This statement is provided by the
Board of Directors of Cermaq ASA («Cermaq») in accordance with the
Norwegian Securities Trading Act of 2007 § 6-16, in connection with
the voluntary offer from Marine Harvest ASA («Marine Harvest») to
acquire all outstanding shares in Cermaq as described in the offer
document dated 5 June 2013.
Please refer to the offer document
published by Marine Harvest for a full description of the
offer.
Cermaq
considers alternative strategic solutions
Cermaq supports a continued
consolidation of the farming industry in selected geographical
areas and considers that a combination of Marine Harvest and Cermaq
could be value creating for the company's shareholders provided an
optimal integration and a fair valuation of the company's shares.
The current offer does not meet those requirements.
The Board of Directors in Cermaq
has previously communicated its commitment to consider other value
creating transactions as alternatives to the offer from Marine
Harvest to demonstrate the values of the company. Cermaq has made
good progress in alternative processes and has an extensive
dialogue with parties interested in different parts of the
company's assets, such dialogue also including a full sale of EWOS.
The Board's clear objective is to present the result of these
discussions prior to the date shareholders must decide upon the
current offer from Marine Harvest.
The Board of Cermaq therefore
strongly encourages the company's shareholders to refrain from a
final evaluation of the offer from Marine Harvest until such
clarification of alternative transactions is presented. The
company's efforts in providing alternative solutions may be
compromised to the extent shareholders decide to provide pre
acceptances to Marine Harvest.
The offer
does not reflect the underlying values in the company or the
synergy potential in the transaction
The offer from Marine Harvest
represents 8.6 shares in Marine Harvest in addition to NOK 53.25
per share in Cermaq in cash. At the time of the launch, the value
of the offer was estimated to NOK 107 per share. The value of the
offer has since been reduced and is today approximately NOK 105 per
share, being broadly the same level as the potential offer that
Marine Harvest presented in its press release 30. April
2013.
The Board considers this offer to
be significantly below the underlying value of Cermaq's operations
and market positions. In its evaluation, the Board has amongst
others considered the pricing of companies that are comparable to
Cermaq's various operations as well as acquisitions and other
transactions within the aquaculture industry.
The Board believes that a
combination of the two companies could create significant
synergies. The potential value creation will, however, as per the
current offer from Marine Harvest, not in a sufficient manner
benefit Cermaq's shareholders. This evaluation is both due to the
price level of the offer as well as the fact that only
approximately half of the consideration will be made in shares in
the combined company.
Based on statements from Cermaq's
largest shareholder, it is considered unlikely that Marine Harvest
will achieve full ownership control in Cermaq. In such a situation
it will not be possible to realize the full synergies and value
creation potential of a combination. The part of the consideration
provided in shares in Marine Harvest will therefore have a lower
value for Cermaq's shareholders.
Cermaq has through extensive
contact also with the company's private shareholders received clear
feedback that the current offer is not considered as satisfactory.
This feedback provides additional support for the Board's
recommendation.
The Board's conclusion with
respect to the value of the offer is also supported by ABG Sundal
Collier Norge ASA («ABGSC»), who is engaged as Cermaq's financial
advisor in relation to the offer. ABGSC on 10 June 2013 provided
its assessment with the conclusion that the offer is inadequate
from a financial point of view. ABGSC's fairness opinion is
enclosed with this statement.
On 31 May, Cermaq also retained
Deutsche Bank as financial advisor in addition to ABGSC.
The offer
includes a very limited take-over premium and is presented at a
most favorable time for Marine Harvest
Based on the closing share price
of Marine Harvest at Friday 7 June 2013, the offer includes a bid
premium (dividend adjusted) of only approximately 17% compared to
Cermaq's share price at 4 April 2013, the day before the Copeinca
transaction was announced, and only approximately 6% compared to
Marine Harvest's own indication of what the share price of Cermaq
would have been at 30 April 2013 if the Copeinca transaction had
not been announced. This is significantly below the premium levels
normally observed in take-over situations. The Board does not
consider the calculations of acquisition premiums presented by
Marine Harvest in the offer document as representative for the
realities.
The Board would also like to
comment that the share price ratio between Cermaq and Marine
Harvest at the time of Marine Harvest's first announcement of a
potential offer (30 April 2013) had not been at a lower level (and
hence at a more beneficial level for Marine Harvest) since April
2011.
High
probability for delayed payment
The offer document does not state
at what time settlement of the offer can be expected to be made.
The stock exchange notification dated 6 June informs, however, that
settlement is expected in July 2013. Should necessary competition
approvals be delayed, Marine Harvest may, in accordance with the
offer document, be able to wait until 30 December 2013 prior to
making a final decision whether to complete the transaction.
The Board has obtained an external
legal evaluation of the above matters in which it is considered
less likely that Marine Harvest will be able to comply with its
intention for payment of the proceeds in July, as stated in the
stock exchange notification dated 6 June.
Shareholders that choose to accept
the offer may therefore risk a significantly later payment than
indicated.
Marine
Harvest holding negative control may adversely impact Cermaq and
its shareholders
The Board considers it most unfortunate that the acceptance level
again is set at 33.4%. Through a controlling minority position,
Marine Harvest may negatively influence Cermaq's future strategic
flexibility and block value creating strategic solutions,
including, but not limited to, mergers, demergers, share issues and
capital decreases, and at the same time such acceptance level
contribute to create a very uncertain situation for the company and
its employees. This may reduce values for other shareholders.
The Board also is concerned to
have as shareholder with negative control one if its major
competitors, as the objectives for such an owner may be contrary to
the company's and the other shareholders' interests.
Consequences
for the company's business
There has been no contact between
Marine Harvest and the Board or Management of Cermaq to discuss a
possible integration between the two companies and a further
organization of the combined businesses. Cermaq's evaluation of
possible consequences of the offer is therefore based on the
relatively limited information provided by Marine Harvest in the
offer document.
Briefly summarized, Marine Harvest
does not seem to plan the closing of any of Cermaq's facilities,
but it is also stated that changes in the Cermaq organization
(«with legal, financial or employment related consequences») cannot
be ruled out. The Board of Cermaq will, however, emphasize that the
offer document from Marine Harvest underlines that the company has
not made any detailed evaluations of the economies of scale or
other synergies that can be realized through a business
combination. A potential comprehensive analysis from Marine Harvest
with respect to the completion of such integration may therefore
include more significant consequences for Cermaq's businesses than
as presented in the offer document.
Conclusion
Based on the above, the Board of
Directors unanimously recommends that the shareholders in Cermaq
reject the offer from Marine Harvest.
Chairman of the Board of Directors
Bård Mikkelsen owns 3.000 shares in Cermaq while the board members
Rebekka Glasser Herlofsen, Åse Aulie Michelet and Jan Helge Førde
own 5.000, 4.000 and 227 shares in Cermaq respectively. CEO Jon
Hindar owns 3.200 shares in Cermaq. Neither Cermaq's CEO nor the
above mentioned board members will accept the offer from Marine
Harvest for their shares.
For
further information please contact:
CEO Jon
Hindar ph.
+47 23 68 50 10 mobile: +47 977 48 829
CFO Tore Valderhaug
ph. +47 23 68 50 38 mobile: +47 995 60 925
About Cermaq - Cermaq is an international group of
companies with activities in fish farming, production of salmonid
feed and research in aquaculture. Cermaq has operations in Norway,
Chile, Canada, Scotland, the main geographic regions for salmon and
trout farming, and in Vietnam. Through its business unit EWOS,
Cermaq ranks as the world's largest producer of feed for salmonids.
The business unit Mainstream is one of the world's leading farming
companies of salmon and trout. The group had sales of around NOK
11.8 billion in 2012. Cermaq is listed on the Oslo stock exchange
with ticker code CEQ. www.cermaq.com
This information is subject
of the disclosure requirements acc. to §5-12 vphl (Norwegian
Securities Trading Act)
ABGSC fairness opinion
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Cermaq ASA via Thomson Reuters ONE
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